Common-Size Income Statement
Quarterly Data
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McDonald’s Corp., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
An analysis of the common-size income statement reveals a strategic shift in the revenue model and a general stabilization of profit margins over the observed period. The most prominent trend is the transition toward a more franchised-centric revenue stream, which has positively influenced the overall cost structure and gross profitability.
- Revenue Composition
- A consistent structural shift is observed in the source of revenues. Revenues from franchised restaurants increased from 56.15% in March 2021 to approximately 61.49% by March 2026. Conversely, sales from company-owned and operated restaurants declined from 42.18% in March 2021 to 35.55% in March 2026. This indicates a strategic move toward an asset-light business model, reducing the proportion of direct operational risk.
- Gross Margin and Direct Costs
- Gross margins exhibited an upward trajectory, rising from 52.07% in March 2021 to a peak of 58.69% in September 2022, before stabilizing in the 55% to 58% range. This improvement is closely linked to the reduction in company-owned restaurant expenses, which decreased from 35.47% of revenues in March 2021 to approximately 31.18% by March 2026. Franchised restaurant occupancy expenses remained relatively stable, fluctuating between 9% and 11%.
- Operating Efficiency and Expenses
- Operating income generally remained strong, frequently exceeding 40% of revenues. However, a significant volatility point occurred in June 2022, where operating income dropped to 29.93% due to a substantial negative swing in other operating income, which hit -15.50% for that quarter. Selling, general, and administrative (SG&A) expenses showed moderate volatility, typically ranging between 9% and 14%, with a notable peak of 14.01% in December 2021.
- Financial and Net Performance
- Interest expenses remained consistent as a percentage of revenue, generally hovering between 4.7% and 6.3%. Net income margins showed a recovery and stabilization pattern; after a dip to 19.49% in March 2022, margins returned to a range of 30% to 33% for the majority of the subsequent periods. The provision for income taxes remained relatively steady, typically accounting for 7% to 9% of total revenues.
In summary, the data indicates a successful transition toward higher-margin franchised revenue, which has helped maintain operating income and net profit margins despite periodic fluctuations in non-operating items and general administrative costs.